The Hindu Business Line : UB Holdings gains on airline valuation

THE counter of UB Holdings was locked in five per cent upper circuit on Friday. The stock closed at Rs 429.15 on the BSE with a volume of 5.57 lakh shares.

Dealers said the interest in the stock is surfacing again considering the future growth of Kingfisher Airlines promoted by the company. There is also market talk that a leading private equity investor is likely to take 26 per cent stake in the airline. Based on the valuation at which the private equity investor will take stake in the airline, market players feel that the stock is undervalued.

Moreover, the market cap of the company is lower than that of the low-cost carrier Spicejet, which was launched simultaneously with Kingfisher. In addition, the company has big stake in McDowell and huge real estate in Bangalore.

High on de-merger

ASSAM Company stock has skyrocketed in the last month with gains of 400 per cent on the BSE. On Friday, the company's stock price was locked in 10 per cent upper circuit at Rs 250.70 with a volume of 83,075 shares. Several institutional investors have also bought the shares of the company.

Dealers said the spurt in the stock price was due to oil find in Assam and now plans to de-merge this division. Market is abuzz with the talk that in the de-merged company, equity stake would also be offered to a foreign oil company. Most likely the stake would be offered to a company providing technical know-how to Assam Company. Though the oil discovered by the company is huge and even at the current market price the stock is undervalued.

Short sellers push indices

AFTER opening sharply lower in the morning, leading stock indices recovered during the day to close higher from the previous close.

Dealers said the sharp recovery in the stock prices was mainly due to the short-covering by market players. The buzz is that several players had gone short on Nifty after it touched a new high in anticipation that the index would fall from that level. However, on Friday, they had to cover their positions as the strong FIIs buying kept the index firm. Market talk is that some more short sellers are trapped and there is possibility that they would cover their positions next week if Nifty Index rises even more from current levels, which in turn would lead to further rise in the index.

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